Annual Report 2012 - Dialog

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68 l Dialog Axiata PLC l Annual Report 2012 Notes to the Financial Statements 2 Summary of significant accounting policies contd. 2.13 Trade and other payables contd. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 2.14 Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. In subsequent periods, borrowings are stated at amortised cost using the effective interest method; any difference between proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings. Interest, dividends, losses and gains relating to a financial instrument, or a component part, classified as a liability is reported within finance cost in the statement of comprehensive income. Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on these preference shares are recognised in the statement of comprehensive income as finance cost. Borrowings are classified as current liabilities unless the Company and the Group have an unconditional right to defer settlement of the liability for at least twelve (12) months after the date of statement of financial position. Identifiable interest costs on borrowing to finance the construction of PPE are capitalised during the period of time that is required to complete and prepare the asset for its intended use. 2.15 Current and deferred taxes The tax expense for the period comprises current and deferred tax. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised directly in equity. In this case, the tax is recognised in equity. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations is subject to interpretation. Management establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred tax is recognised using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the date of the statement of financial position and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. 2.16 Employee benefits (a) Defined benefit plan - Gratuity Defined benefit plan defines an amount of benefit that an employee will receive on retirement, usually dependent on one or more factors such as years of service and compensation. The defined benefit plan comprises the gratuity provided under the Act, No 12 of 1983.
Annual Report 2012 l Dialog Axiata PLC l 69 The liability recognised in the statement of financial position in respect of defined benefit plan is the present value of the defined benefit obligation at the date of the statement of financial position together with adjustments for unrecognised pastservice costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using appropriate interest rates by the actuarial valuer. Past-service costs are recognised immediately in statement of comprehensive income, unless the changes to the defined benefit plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised immediately in the statement of comprehensive income. The assumptions based on which the results of the actuarial valuation was determined, are included in note 24 to the financial statements. (b) Defined contribution plans For defined contribution plans, such as the Employees’ Provident Fund and Employees’ Trust Fund, the Company and the Group contribute 12% or 15% and 3% respectively, of the employees’ basic or consolidated wage or salary. The Company and the Group have no further payment obligation once the contributions have been paid. The Company and the employees are members of these defined contribution plans. (c) Short term employee benefits Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Company and the Group. (d) Termination benefits Termination benefits are payable whenever an employee’s service is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company and the Group recognise termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. (e) Share-based compensation The Company and the Group operate an equity-settled, share-based compensation plan for its employees termed Employees’ Share options Scheme (“ESOS”). Employee services received in exchange for the grant of the share options are recognised as an expense in the statement of comprehensive income over the vesting period of the grant, with a corresponding increase in equity. The total amount to be expensed over the vesting period is determined by reference to the fair value of the share options granted: including any market performance conditions excluding the impact of any service and non-market performance vesting conditions excluding the impact of any non-vesting conditions
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Dialog Axiata PLC l Annual Report 2
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Introduction to the Company Dialog
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Annual Report 2012 l Dialog Axiata
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Mr. Moksevi Prelis Independent, Non
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Mr. James Maclaurin Non-Independent
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Group NPAT Rs. Mn +23% 7,000 6,000
Page 19 and 20: Gross Debt to Equity 2.0 1.5 1.0 0.
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Annual Report 2012 - Dialog

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